2011 Exploration Delivers Reserve Growth at Meliadine and Kittila ; Meliadine’s Wesmeg and Kittila’s Rimpi Deposit S Expanded ; $106 Million Exploration Budget for 2012
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February 15, 2012 Investor Relations (416) 947-1212
(All amounts expressed in U.S. dollars unless otherwise noted)
2011 EXPLORATION DELIVERS RESERVE GROWTH AT MELIADINE AND KITTILA; MELIADINE’S WESMEG AND KITTILA’S RIMPI DEPOSITS EXPANDED; $106 MILLION EXPLORATION BUDGET FOR 2012
TORONTO (February 15, 2012) - Agnico-Eagle Mines Limited (“Agnico-Eagle” or the “Company”) is providing its 2011 reserve and resource statement, an update on the 2011 exploration program results, as well as an outline for its exploration program in 2012.
2011 Reserves and Resources Update
Agnico-Eagle’s 2011 proven and probable gold reserves of 18.8 million ounces compares with the 2010 total of 21.3 million ounces. The 2011 gold production, the October 2011 suspension of mining at Goldex and the associated reclassification of its reserves to resources, combined with higher costs at Meadowbank which resulted in a new mine plan and lower reserves, each negatively impacted the 2011 total.
“Our two best advanced exploration stories continue to be Kittila and Meliadine, with the recent acquisition of La India and Tarachi in Mexico providing additional exploration upside” said Sean Boyd, President and CEO. “In 2012, we will continue to focus our aggressive exploration approach on building reserves at Kittila, Meliadine and in Mexico to support our production growth plan” added Mr. Boyd
The summary table below highlights the changes in reserves at each of the Company’s assets.
| Gold Reserves By Mine/Project | Proven & Probable Reserve (000s ounces) | ||
|---|---|---|---|
| December 31 | 2011* | 2010 | Change |
| LaRonde Goldex Lapa Kittila Pinos Altos Meadowbank Meliadine Bousquet | 4,700 - 501 5,177 3,103 2,201 2,877 191 | 4,818 1,566 677 4,880 3,271 3,486 2,600 - | (118) (1,566) (176) 297 (168) (1,285) 277 191 |
| Total | 18,750 | 21,299 | (2,549) |
*For full details including tonnages and grade, see the Detailed Mineral Reserve and Resource Data table in this news release
The assumptions incorporated in the 2011 reserve calculation, as compared with those in 2010, are as follows:
Reserve Assumptions 2011 2010
Gold (US$/oz) $1,255 $1,024 Silver (US$/oz) $23.00 $16.62
| Copper (US$/lb) | $3.25 | $2.97 |
| Zinc (US$/lb) | $0.91 | $0.86 |
| C$/US$ | 1.05 | 1.08 |
| US$/Euro | 1.3 | 1.4 |
| MXP/US$ | 12.86 | 12.43 |
Changes In Reserves
LaRonde
The small decline in LaRonde’s proven and probable reserves is largely the result of the gold production in 2011, and partially offset by the effect of higher metals price assumptions.
Goldex
All of the proven and probable reserves at Goldex were reclassified into mineral resources following the suspension of mine operations and the writedown of the mine in October 2011. At the time of reclassification, there were approximately 1.4 million ounces of gold reserves at Goldex, while approximately 150,000 ounces of gold had been extracted in 2011 prior to the October suspension.
Lapa
The majority of the decline in Lapa’s proven and probable reserves is represented by the ore processed during 2011. Increases in gold reserves due to higher metal price assumptions were largely offset by higher dilution applied in the current reserve estimate.
Kittila
New proven and probable reserves at the Roura and Rimpi zones, as well as higher gold price assumptions had a positive impact on Kittila’s reserves in 2011. Some of these increases in reserves have been offset by the amount of gold mined during 2011, as well as the impact of more conservative operating cost assumptions, with the net increase in reserve being approximately 300,000 ounces of gold.
Pinos Altos
The Pinos Altos (including Creston Mascota) proven and probable reserves declined by approximately 170,000 ounces in 2011, largely due to ore extraction. The total impact of ore extraction was partially offset by successful exploration results at Creston Mascota during 2011, which increased its mine life by approximately two years, through 2017, with the addition of approximately 75,000 ounces of proven and probable reserves.
Meadowbank
Considering the persistently high operating costs, a technical and operating review at the Meadowbank mine has resulted in a new pit outline, with higher grade cut-off parameters. The newly optimized mine plan, combined with the extraction of ore in 2011, had the impact of reducing proven and probable reserves by 1.3 million ounces of gold.
Meliadine
At Meliadine, an extensive 2011 drilling program was primarily focused on two main zones, Tiriganiaq and Wesmeg. Much of the program was focused on resource conversion drilling and resulted in an additional 0.3 million ounces of proven and probable gold reserves, mainly at the Tiriganiaq zone, but also resulted in initial reserves at the F zone deposit. Proven and probable gold reserves at Meliadine are now 2.9 million ounces, while measured and indicated resources total 1.7 million ounces of gold (12.6 million tonnes grading 4.09 g/t) and inferred resources represent 2.4 million ounces of gold (12.7 million tonnes grading 5.98 g/t). This represents a significant increase in the deposit from the time of acquisition in mid-2010, when the deposit had no reserves, indicated resources of 3.2 million ounces of gold (8.8 million tonnes grading 5.21 g/t) and inferred resources of 1.7 million ounces of gold (11.8 million tonnes grading 6.94 g/t).
Resources Show Growth In 2011
The overall gold resources were positively impacted by the results of exploration drilling at Kittila, Meliadine, and Pinos Altos.
The Company’s measured and indicated resources have increased by 3.2 million ounces of contained gold over the 2010 statement to a total of 9.6 million ounces of gold (168 million tonnes grading 1.78 g/t). The increase in measured and indicated resources includes the addition of 1.4 million ounces of gold from the reclassification of Goldex proven and probable reserves and an additional 1.2 million ounces of measured and indicated gold resource (48 million tonnes grading 0.74 g/t) from the acquisition of the La India property. Inferred resources of 9.7 million ounces of gold in 2011 have decreased by 0.2 million ounces of contained gold over the year, primarily as a result of successful conversion drilling at Kittila and La India, offset by decreases at Meadowbank.
December 31, 2011 Resources
Measured & Indicated Inferred Resources* Resources* (Au koz) (Au koz)
LaRonde 415 1,347 Lapa 258 110
| Meadowbank | 1,315 | 459 |
| Kittila | 1,026 | 1,165 |
| Pinos Altos | 842 | 782 |
| La India | 1,150 | 715 |
| Meliadine | 1,658 | 2,438 |
| Goldex | 2,094 | 1,588 |
| Bousquet | 768 | 598 |
| Other | 107 | 515 |
| Total | 9,633 | 9,712 |
*For full details including tonnages and grade, see the Detailed Mineral Reserve and Resource Data table in this news release
2012 Reserve Target and Exploration Budget
The Company anticipates the year-end 2012 reserves to grow to approximately 20 million ounces of gold, or an increase of approximately 12%, net of production, through an extensive exploration drilling campaign.
The 2012 exploration program will be primarily focused on accelerating the drilling programs at Kittila, Meliadine and Mascota/Bravo, conversion of resources at La India and further exploration of Tarachi. These programs will form part of the feasibility studies at each of these properties, which would add significant upside potential for the Company’s near term growth production profile. In 2012, Agnico-Eagle’s exploration budget is approximately $106 million, with about 38% expected to be spent on mine-site and advanced project exploration, as shown in the table.
2012 Exploration Expenditures Exploration Budget ($, thousands) Capitalized Expensed LaRonde 740 Lapa 344 Meadowbank 1,587 Kittila 12,172 Pinos Altos 4,404 Meliadine 20,700 Grassroots exploration 61,900 Corporate Devt. & Project Evaluations 4,500 Total 39,947 66,400
2011 Exploration Highlights
Agnico-Eagle spent approximately $108 million on regional and minesite exploration during 2011, including 390,000 metres of drilling. An additional $35 million was spent on a bulk sample and other activities at Meliadine, the results of which are expected in the second quarter of 2012. Much of the exploration expenditures were spent on grassroots and brownfields exploration (approximately $76 million) and resulted in 216,046 metres of drilling. The Company plans to continue to focus its exploration efforts at Meliadine, Kittila, and its assets in Mexico.
Meliadine – Tiriganiaq Reserves and Wesmeg Resources Increased; More Assays and Bulk Sample Results Pending
At the Meliadine project, the 2011 exploration program included $40 million spent on 104,502 metres of core drilling, with the majority of it focused on infill drilling at Tiriganiaq. As of year-end 2011, about one third of the 2011 assays remain pending due to a backlog at the independent laboratory. These intersections were not included in the current reserve and resource statement but are expected to be received by the second quarter of 2012.
Tiriganiaq Zone Exploration Confirms Grade, Completes Underground Bulk Sample
Drilling at the Tiriganiaq Zone in 2011 has focused on resources to reserves conversion from surface to 350 metres depth, but has encountered significant intersections outside of the current resources envelope. The grades and thicknesses of the new intersections have been similar to the values in existing reserve and resources.
The table below presents the most significant drill results from the Tiriganiaq zone since June. The hole collars are located on the Meliadine geology map, and the pierce points are shown on the Tiriganiaq longitudinal section.
Significant recent Tiriganiaq zone drill results
| Drill Hole | Lode ID | From (metres) | To (metres) | Depth below surface (metres) | Estimated True Width (metres) | Gold (g/t) (cut)* |
|---|---|---|---|---|---|---|
| M11-1092 | 1000 | 352.0 | 368.3 | 331 | 11.2 | 7.4 |
| M11-1108A | 1000 | 367.0 | 378.0 | 340 | 9.6 | 6.2 |
| M11-1119 | 1000 | 327.5 | 331.1 | 291 | 2.9 | 14.5 |
| M11-1161 | 1100 | 379.7 | 386.7 | 345 | 6.4 | 13.4 |
| and | 1025 | 414.1 | 417.5 | 368 | 3.0 | 35.5 |
| M11-1171 | 1050 | 319.8 | 326.0 | 284 | 5.1 | 6.2 |
| M11-1173 | 1262 | 260.1 | 265.6 | 194 | 5.5 | 16.75 |
| M11-1201 | 1100,1151 | 296.2 | 304.3 | 259 | 6.6 | 21.9 |
| M11-1211 | 1256 | 322.2 | 329.0 | 321 | 3.6 | 11.7 |
| M11-1236 | 1255 | 384.0 | 389.0 | 352 | 3.2 | 9.36 |
| M11-1251 | 1153 | 376.4 | 381.0 | 313 | 3.3 | 23.3 |
| M11-1349 | 1100 | 274.7 | 280.5 | 240 | 5.8 | 22.6 |
*Holes at Tiriganiaq deposit use a cutting factor ranging from 15 to 120 g/t gold depending on the lode.
[Tiriganiaq Longitudinal Section]
Recent drilling expanded the Tiriganiaq resources to the west at depth, with hole M11-1092 intersecting 7.4 g/t gold over a true width of 11.2 metres at a depth of 330 metres below surface. The central part of the deposit has shown high-grade intercepts inside and outside the resource envelope (see holes M11-1211 and M11-1173), and the resources have also been expanded downward on the east side of Tiriganiaq (see hole M11-1171).
During the second half of 2011, the Company conducted an underground bulk sample on the Tiriganiaq deposit, which included 222 metres of lateral development on two levels, resulting in 8,460 tonnes of broken material. Early results from the bulk sample indicate significantly improved confidence with regards to the continuity and grade of the Tiriganiaq deposit. A complete analysis of the results is expected during the second quarter of 2012 and the results will become part of the updated feasibility study expected to in late 2013.
Wesmeg Zone Extended
The Wesmeg zone has continued to demonstrate significant growth, with resources growing from approximately 1.0 million tonnes grading 4.4 g/t gold (or 143,000 ounces of gold) in the inferred category only in 2010 to 3.5 million tonnes grading 3.0 g/t gold (or 343,000 ounces of gold) in the indicated category, and 3.7 million tonnes grading 3.5 g/t gold (or 411,000 ounces of gold) in the inferred category in 2011.
Drilling in 2011 has helped extend the Wesmeg zone to 3.3 kilometres of strike length and increased its depth to at least 300 metres, showing the Wesmeg resource to have similar size potential to the Tiriganiaq zone which is approximately 400 metres to the north.
The program has also discovered a new horizon approximately 100 metres from Wesmeg and approximately 100 metres from Tiriganiaq. This discovery raises the possibility of yet another satellite deposit in close proximity to the existing deposits. This also highlights the exploration potential of the overall Meliadine property, much of which has not yet been fully evaluated.
Significant recent Wesmeg zone drill results
| Drill Hole | From (metres) | To (metres) | Depth below surface (metres) | Estimated True Width (metres) | Gold grade (g/t) (cut)* |
|---|---|---|---|---|---|
| M11-1048** | 189.0 | 197.0 | 135 | 7.6 | 4.1 |
| M11-1111 | 102.5 | 114.5 | 86 | 11.8 | 4.8 |
| M11-1123 | 60.0 | 64.5 | 42 | 3.7 | 8.7 |
| M11-1130 | 64.0 | 70.5 | 48 | 6.3 | 5.0 |
| M11-1143 | 51.6 | 56.5 | 38 | 4.0 | 4.4 |
| M11-1206 | 138.9 | 145.5 | 99 | 6.6 | 13.7 |
| M11-1314 | 480.0 | 487.0 | 380 | 6.8 | 5.1 |
| M11-1346 | 133.0 | 143.0 | 96 | 9.5 | 4.2 |
- Holes at Wesmeg deposit use a cutting factor of 30.0 g/t gold.
** Hole M11-1048 was previously reported in a news release on June 27, 2011
[Meliadine Local Geology Map]
[Wesmeg Composite Longitudinal Section]
Approximately one kilometre to the east of the Wesmeg resource envelope, hole M11-1206 intersected 13.7 g/t gold over a true width of 6.6 metres at a depth of approximately 100 metres below surface. This intercept is very close to hole M11-1048 (4.1 g/t gold over a true width of 7.6 metres at a depth of 135 metres below surface), reported in the June 27, 2011 news release. These two intercepts are indicating a new area of interest with good grade and thickness near surface that is potentially open in all directions and is untested farther east.
Drilling has confirmed the grade of the existing resource and extended it at depth. Hole M11-1111 intersected 4.8 g/t gold over 11.8 metres at a depth of 85 metres below surface, while hole M11-1346 intersected 4.2 g/t gold over a true width of 9.5 metres at a depth of 96 metres below surface. Approximately one kilometre to the west of the existing resource, hole M11-1130 intersected 5.0 g/t gold over a true width of 6.3 metres at a depth of 50 metres below surface. The 2012 exploration program will aim to better define the Wesmeg deposit over its 3.3 km length.
A new lens of mineralization in between Tiriganiaq and Wesmeg appears to have been intersected by hole M11-1314, as shown on the Tiriganiaq-Wesmeg generalized cross section. The hole intersected 5.1 g/t gold over a true width of 6.8 metres at a depth of 380 metres below surface. This intercept is meaningful, as it opens Wesmeg’s potential for underground high grade mineralization that could be potentially be accessible using Tiriganiaq’s underground infrastructure. This area will be an important target in 2012, given that it could improve the underground component of the deposit with multiple parallel mineralized horizons.
The planned exploration budget at Meliadine in 2012 is $20.7 million for 90,000 metres of drilling in the known deposits, as well as $9.6 million for 25,000 metres on the grassroots exploration.
[Generalized Tiriganiaq-Wesmeg cross section]
Kittila Reserve Increases; Rimpi and Roura Zones Expand Northward and at Depth
Exploration has expanded the Kittila mineralization in the Rimpi and Roura deposit areas at depth and to the north, highlighting further exploration upside at this deposit. Kittila now contains the Company’s largest contributor to proven and probable gold reserves at 5.2 million ounces. The proven and probable reserves at Kittila have increased by approximately 0.3 million ounces in 2011, with most of the growth coming at depth in the Roura and Rimpi zones.
The table below presents selected recent drill results from the mine site exploration. The pierce points of the intercepts are shown on the Kittila longitudinal section.
Significant recent Rimpi and Roura zone exploration drill results
| Drill Hole | Zone | From (metres) | To (metres) | Depth below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (uncut) |
|---|---|---|---|---|---|---|
| RIE-11-010 | Rimpi Central | 1060.0 | 1084.0 | 928 | 14.7 | 6.00 |
| and | 1091.0 | 1103.0 | 948 | 7.5 | 6.58 |
| RIE-11-017 | Rimpi Central | 1036.8 | 1042.0 | 884 | 3.5 | 8.27 |
| RIE-11-017B | Rimpi Central | 960.0 | 983.0 | 796 | 17.9 | 7.67 |
| RIM-10-004 | Rimpi South | 528.0 | 533.0 | 457 | 3.5 | 14.94 |
| and | 575.0 | 591.0 | 493 | 11.8 | 6.03 | |
| ROU-09-002I | Roura North | 632.0 | 663.0 | 606 | 14.9 | 5.34 |
| and | 699.0 | 724.0 | 655 | 12.4 | 4.68 | |
| ROU-10-036E | Roura North | 1021.0 | 1046.0 | 949 | 10.1 | 6.98 |
| ROU-110001H | Roura North | 964.0 | 972.2 | 868 | 4.5 | 8.46 |
| ROU-11-005 | Roura North | 1520.0 | 1533.0 | 1369 | 8.5 | 4.22 |
[Kittila longitudinal section]
Of particular interest is the drilling in the Rimpi Zone, which is the northernmost zone known at Kittila, where recent intercepts have confirmed and expanded the zone at depth and to the north. Hole RIM-10-004, which intersected two zones at depths of 460 and 490 metres below surface, helped extend the reserves at depth by close to 200 metres. Holes RIE-11-017, RIE-11-017B and RIE-11-010 followed the Rimpi Trend downward, with multiple intercepts more than 450 metres below and slightly north of the previous Rimpi Zone resources envelope.
To date, the mineralization at Rimpi appears to be thicker and higher grade than that found at the main Suuri deposit at Kittila.
Within the Roura resource envelope, recent infill drilling has confirmed long intercepts at higher grades than previously observed, converting resources to reserves. Hole ROU-09- 002I helped convert resources to reserves at 605 metres depth. At further depth, between 870 and 950 metres, holes ROU-10-36E and ROU-11-001H intersected grades between 7 g/t and 9 g/t gold, extending the Roura North reserves northward.
Below the Roura North resource, hole ROU-11-005 intersected 4.2 g/t gold over a true width of 8.5 metres at a depth of 1,370 metres below surface, which is 120 metres below the current resources envelope.
Mine-site exploration at Kittila in 2012 is estimated to include 7,500 metres of conversion and 32,200 metres of exploration drilling at a cost of $13.5 million. The drilling focus remains on Rimpi and on demonstrating continuity of the mineralization at different depths and could significantly increase the resource in the extreme north trend.
Mexico
The acquisition of Grayd Resource Corporation, and its La India project in Mexico has added approximately 1.2 million ounces of measured and indicated resources (48 million tonnes grading 0.74 g/t)and 715,000 ounces in inferred resources (32 million tonnes grading 0.69 g/t). La India will continue to be evaluated in 2012 for its potential as a lowcost open pit heap leach mine. This acquisition also included a highly prospective land package in the surrounding area, including the Tarachi discovery which will be a focus of exploration during 2012.
At Pinos Altos, as shown on the attached graphics, new reserves at the Creston Mascota deposit have resulted in a new, larger open pit design. Exploration results indicate that Creston Mascota could extend further to the southwest to include the adjacent Bravo/Carola deposits, increasing the potential of a significantly larger open pit that would include all three deposits. Encouraging recent drill results from Creston Mascota are shown in the table below and are located on the Creston Mascota longitudinal section.
[Creston Mascota map showing pit designs, long section and drill hole locations]
Significant recent Creston Mascota exploration drill results
| Drill Hole | From (metres) | To (metres) | Depth below surface (metres) | Estimated true width (metres) | Gold grade (g/t) (cut)* | Silver grade (g/t) (cut)* |
|---|---|---|---|---|---|---|
| CM11-288 | 48.5 | 69.5 | 51 | 17 | 5.0 | 35.8 |
| CM11-311 | 34 | 53 | 20 | 18.3 | 4.1 | 47.1 |
- Holes at the Creston Mascota deposit use a cutting factor of 9 g/t gold and 88 g/t silver.
Hole CM11-288 shows higher grade than expected in this area, while hole CM11-311 is a high grade intercept in a new resource area.
The potential for further expansion near Creston Mascota, together with an encouraging outlook for the La India project and the Tarachi exploration potential, reinforce the growing importance of the Mexican operations as a key contributor to Agnico-Eagle’s operating and growth profile. The Company plans to spend $10.5 million on the La India property, drilling 45,000 metres in 2012. At Pinos Altos, the expected 2012 exploration program is comprised of $5.8 million, to be spent on 33,800 metres of drilling,
About Agnico-Eagle
Agnico-Eagle is a long established, Canadian headquartered, gold producer with operations located in Canada, Finland and Mexico, and exploration and development activities in